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Nielsen To Follow The Audio: Jumps Back Into Radio Ratings, Competes With Arbitron

For the past couple of years, the mantra at Nielsen Co. has been to "follow the video." Now it's adding some audio. For the first time in nearly half a century Nielsen will begin reporting ratings for
radio audiences in the U.S., going head-to-head with the radio industry's de facto advertising currency, the ratings of Arbitron Co. The move comes as Arbitron is under siege among many of its top
customers, as well as civil rights activists in major markets, about concerns over the representative of samples it is using to produce radio audience estimates via its new portable people meter
ratings system.

The timing also is interesting because until earlier this year, Arbitron and Nielsen were tied up in an ambitious joint venture - Project Apollo - to produce so-called
"single-source" ratings measuring media usage and product purchasing, of which the PPM technology was a major component. It also comes as Nielsen is accelerating its dominance of media audience
measurement globally and across a variety of new and emerging media platforms - and apparently, among some old ones.

Nielsen executives were circumspect about the budding rivalry between it and
Arbitron, but at least two major Arbitron clients - Cumulus Media Inc. and Clear Channel Radio - are backing the new Nielsen service in a number of markets, where they will discontinue using Arbitron
ratings.

The new service, which will generate a once-a-year report based on a Spring survey of radio listeners in 50 markets, will release its first ratings estimates next August. Cumulus has
agreed to subscribe to the ratings in all 50 of the markets - mostly smaller ones - while Clear Channel has agreed to subscribe to them in 17 markets where it operates. The service is the outcome of
an RFP (request for proposal) initiated by Cumulus in April, when it had a falling out with Arbitron over the viability of its ratings in smaller markets.

Cumulus COO John Dickey told
MediaDailyNews that the decision to go with Nielsen was due in large part to the credibility Nielsen already has on Madison Avenue, as well as the advantages of the methodology it will be using
to survey radio audiences. Instead of utilizing a newfangled, state-of-the-art audience measurement technology, Nielsen will deploy old school paper diaries, though it will utilize a peel-and-paste
sticker methodology that Nielsen has deployed successfully for radio audience measurement internationally in 11 key global markets, and will utilize what is considered by some to be a better system
for drawing the samples it uses to produce its ratings. The new "address-based" sampling method - something Nielsen also is using to upgrade the way it builds its TV and other media-based audience
measurement systems - replaces the old "random digital dialing" method that has historically relied on telephones to draw a random probability sample. The problem with the telephone-based sampling is
it is growing increasingly difficult and unrepresentative to utilize telephones to draw samples in the U.S., where many households no longer have a land line, and now rely on mobile phones, which
currently cannot be incorporated into that method. That has been a part of the problem plaguing Arbitron's system, though it has been racing to overcome that.

Nielsen has committed to producing
its radio audience estimates from samples that are considerably larger than those used by Arbitron in smaller radio markets: between 1,200 respondents on the low end and as many as 2,200 respondents
on the high end.

Another key element of the Nielsen method is that it will incorporate "single-source" sampling features, in which people participating as radio panelists will also provide
benchmark information about their usage of consumer products and services, as well as other media, so that Nielsen can index how valuable radio listeners are for marketers. Nielsen also designed those
questions so that they will serve as solid "hooks" that will enable Nielsen to fuse the radio ratings data with other media and marketing research it produces.

The move back into radio also comes
as Nielsen appears to be expanding on virtually every media audience measurement front conceivable - both in terms of platforms, as well geographically. Following its recent asset swap with WPP Group,
Nielsen estimates that it now controls the TV ratings data in three-quarters of global TV advertising marketplace. The PC, mobile and out-of-home video screens remain key expansionary priorities as
part of Nielsen's original A2/M2 (anytime/anywhere) "follow the video" initiative, and it also is deemed a potential player in some other traditional media measurement scenarios.

In March, the
Magazine Publishers of America initiated a request for proposal to develop "an improved approach to magazine measurement for advertisers based on audience and readership."

Details of that RFP
process have not been disclosed, but magazine industry executives are known to have discussed scenarios for magazine audience measurement with Nielsen. Mediamark Research & Intelligence (MRI)
currently is the source of "currency" data for magazine advertising buys.

The currency for local newspaper advertising buys, meanwhile, remains Scarborough Research, a company that is jointly
owned by Arbitron and Nielsen, which should lead to some interesting Scarborough boardroom conversations given Nielsen's move into radio audience measurement.